Rising price of housesputs strain on families

26th January 2004, Comments 0 comments

26 January 2004, MADRID – Spaniards spend more than half their incomes paying off their mortgages, according to a survey published Monday.

26 January 2004

MADRID – Spaniards spend more than half their incomes paying off their mortgages, according to a survey published Monday.

On average they devote 55 percent of their income to paying for their homes.

According to a study by the Caixa de Catalunya bank, the dramatic increase in housing prices (91.6 percent) in Spain between 1998 and 2003, compared with a 27.6 percent average rise in family incomes, has led to a greater financial strain to buy a home, despite the fall in banking interest rates

There are some parts of Spain where house prices are such that people spend more than the average on their mortgages.

People living in Madrid spend 70 percent of their earnings on their homes; in Catalonia the average is 65 percent, in the Balearic Islands they spend 57 percent and in the Basque Country they spend 68 percent of their incomes.

In contrast, families in Castilla-La Mancha spend only 36 percent of their income, on average, on their homes.

For the purpose of the survey, the 12.3 million families in Spain were divided into four groups, and the economic strain was calculated with respect to average home size bought in each group.

This took into account that families with lower incomes purchase homes with a surface area of between 70 and 80 square metres, while the higher income fourth group families buy houses with more than 130 square metres.

The figures analysed show that a family with an average yearly income of EUR 30,958 devotes 55.4percent to buying a 100 square metre home at an average price of EUR 1,622.70 per square metre.

The EUR 1,622.70 figure is the average price, ranging from EUR 796.40 in Extremadura in the west of Spain, to EUR 2,510.20 in the richer Basque Country.

Prices per square metre which are above the national average include the Balearic Islands (1,928.30), Cantabria (1,623.8), Catalonia (2,073.90), Madrid (2,478.60) and Navarra (1,646.80)

Family incomes range from EUR 22,166 yearly in Extremadura to EUR 38,956 in the Basque Country.

Lower than average yearly incomes include Andalucía (26,107), Asturias (28,577), Castilla y León (27,763), Castilla-La Mancha (26,295), Valencia (29,722) and Murcia (27,571), but families residing here also devote less of their earnings to purchase a home, Extramadura (37.9percent), Murcia (39.2percent), Galicia (39.9 percent), La Rioja (41.1percent), Valencia (42.3percent), Aragón (48 percent), Navarra (48.1 percent) and the Canaries (48.7percent).

[Copyright EFE with Expatica]

Subject: Spanish news

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